By Myrna M. Velasco
State-run Philippine National Oil Company (PNOC) has formally inked an agreement with the Asian Development Bank (ADB) on consultancy services that the latter will have to render on the evaluation of ‘unsolicited proposals’ for the government-underpinned US$2.0 billion liquefied natural gas (LNG) infrastructure build-up.
PNOC President and Chief Executive Officer Reuben S. Lista indicated that ADB’s consultancy engagement had already gotten the go-signal of the company’s board and “formal signing was made yesterday.
Moving forward, Lista noted that the technical working group (TWG) of PNOC in tandem with the ADB consultants “will now proceed to stage 2 of the unsolicited proposal process after validating the completeness of the papers of the proponents.”
The state-run firm cornered at least seven ‘unsolicited tenders’ from a good mix of local and foreign investors, but as previously indicated by PNOC Board Chairman and Energy Secretary Alfonso G. Cusi, two of these had already been discarded on non-compliance to requirements.
The remaining evaluation then will focus on the other five unsolicited bids, namely that of: First Gen Corporation; China National Offshore Oil Corporation; Indonesian firms PT Jaya Sumadra Karunia as well as PT Perusahaan Gas Negara LNG/PT Bosowa Corporindo and local partner MOF Corporation; and that of the Energy World Corporation.
At the TWG-ADB evaluation level, Lista explained that “this is where the offers are evaluated and if it serves the interest of PNOC and the government, they will go to stage 3 where some other companies might be interested to challenge.”
He qualified that if no other companies will put up viable matching offers, “then we will do the award” on the chosen entity.
Lista emphasized that the timetable of the targeted project award shall depend on the pace of work of both the PNOC-TWG and the ADB as consultant.
PNOC has always been vocal that it wants its ‘banked gas’ be aligned as its equity investment in the joint venture that will advance the chain of the propounded LNG projects – that shall be in the range of LNG import terminal, distribution system and networks as well as the gas off-taker power plant venture. In the state-run company’s project blueprint is an initial 200-megawatt gas-fired power plant that shall serve the energy needs of economic zones.
Apart from equitizing its banked gas from the Ilijan facility, the other key consideration being looked at by PNOC on the investment-proposals would be the keenness of the proponent to eventually turn the project into a bigger scale “gas hub” to match those being proposed by other countries in the region.